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London Forex Report: Deflated Dollar Awaits Dot Plot

London Forex Report: Deflated Dollar Awaits Dot Plot

London Forex Report: Global risk appetite may take a backseat this morning as US president Trump came out with guns blazing in his debut address to the United Nations, saying that “if forced to defend itself or its allies, we will have no choice but to totally destroy North Korea” and “Rocket Man is on a suicide mission for himself and for his regime”. Elsewhere, news of a 7.2 magnitude earthquake struck near Mexico City. Otherwise, it was a relatively quiet session for financial markets yesterday, with Wall Street and UST bond yields higher but the USD weaker, as investors are awaiting the FOMC decision.

NORTH AMERICA US housing market data was mixed as housing starts declined on a monthly basis even as building permits rebounded by the same measure. Number of new housing construction that began construction in August dipped 0.8% MoM to 1.18 million, and though improved from a 2.2% decline previously, it was lower than an expected increase of 1.7%. Building permits rose 5.7% MoM and rebounded from a 3.5% fall in July. While generally considered as a leading indicator of future demand, there is no assurance that it gets translated into firmer housing starts and sales.

EUROPE Save for construction output, data out of the Eurozone improved. The ECB’s current account surplus widened to €25.1b in July from €22.8b in June. ZEW’s survey of economic expectations returned more positive results as reading rose to 31.7 in Sept, up from 29.3 previously. Meanwhile, construction output grew slower by 3.4% YoY in July, easing from 4.3% previously.

ASIA Japan’s trade surplus narrowed in August, sliding to ¥113.6b from ¥421.7b. Even as exports growth surged 18.1% YoY to ¥ 6278, imports kept pace with a 15.2% increase to ¥ 6164. Minutes of the previous RBA meeting revealed that board members remain optimistic on employment growth, which was opined to be broad-based across the states, and further improvement is likely to continue based on forward indicators. Members also noted that macroeconomic data over the last month “had, on balance been positive and consistent with gradual pick-up in growth as forecast”.

1-3 Week View – 1.3263 achieved as this acts as support 1.3836 is the next upside objective only a close back below 1.2770 would jeopardise the bullish advance.Retail Sentiment: BearishTrading Take-away: Long

Patrick has been trading for the past ten years. After liquidating several accounts in his early days he stopped ‘gambling’ and applied himself as a student of risk. Self taught and more self aware thanks to Mr Market. Patrick applies simple technical strategies based around market price and time structure to identify high probability trade locations.